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Uber was swindled out of $100m in ad spend and no one is talking about it

The ad, is just what I described above, a montage of vignettes, no more no less. Last year in August, Uber, to increase the adoption of its cab-hailing service, had launched its first television campaign, ‘Isse apni hi gaadi samjho’. The intent of this new campaign is to make Uber perhaps more aspirational, more relevant and more meaningful to the public at large.

In the past, it’s been entangled in a stream of lawsuits, including a two-time London ban , a nationwide ban in Germany, and a multi-year intellectual property case involving Waymo and Anthony Levandowski, among others. But from Russia to Southeast Asia to China, the cost of expansion to global markets has been high. Rider churn is not a significant problem — Uber’s share of the US ride-hailing market is about 69%, according to Second Measure. Uber’s customer acquisition, especially early on, has been driven in large part by local network effects and financial incentives for new users. Uber’s churn and wage problems represent one of the most significant costs involved in running the company and one of the biggest potential long-term threats.

The ad agency has tried to expand the message to a higher altitude by taking this to a larger canvas of mobility, change and self-dependability. But what has been lost completely are issues of passenger safety and customer service issues like waiting time, refunds, cancellations, surge pricing, rude drivers and more. Honestly, Uber still needs to establish a functional superiority over its competitor Ola before taking the philosophical high ground.

Where Uber’s geographic expansion has failed, it has not managed to bring those costs under control. Only about 4% of drivers remain on Uber’s platform after one year, according to a 2017 analysis from The Information. In addition to increasing the supply to high-demand areas, surge pricing also helps control customer demand, as those unwilling to pay a higher price will find other means of transportation, while others will pay for the surge. This last point — surge or dynamic pricing creating liquidity — is one of the pillars of the Uber business model. Old-school taxis find fares either by driving around and picking them off the street , or having a dispatcher (with phoned-in customer requests) instructing them on where to go.

Meanwhile, criticism has continued to escalate, as costs rise for drivers, customers, and restaurants alike, raising questions around the viability of this business model. Through these experiments marketers large and small made digital ads work better mckinsey never also agency told fda for them. Chase did not need to show their ads on 400,000 websites, when showing ads to humans on 5,000 yielded the same outcomes. Small business owners did not need to buy millions of ad impressions, when buying 1/10 the quantity yielded more sales.

Because brand-focused ads work over a much longer timeframe, be it months or years, you can’t expect to see an immediate decrease in conversion volume when they’re turned off. Of course if installs from a fraudulent channel never converted to rides booked (i.e. revenue), then this isn’t an effective assumption. _tt_sessionId13 monthsTo measure and improve the performance of your advertising campaigns and to personalize the user’s experience on TikTok. At Beaconwe’ve been champions of transparent marketing data since our foundation. With click fraud detection and mitigation across search and social, Beacon feeds other parts of the Martech stack with better quality data, to enable improved analytics, decision-making and results.

As early as the start of 2020, there were stories coming out about how they’d realised they’d wasted huge multi-million dollar budgets on fraudulent ads. Since then, Uber has continued to tangle with multiple ad agencies over this exact issue. In 2019, Uber sued five ad networks — Hydrane SAS, BidMotion, Taptica, YouAppi and AdAction Interactive — for a similar issue, alleging the networks had wasted tens of millions on “low-quality or fraudulent” ads.

Its primary “defense” (known as “Travis’ Law” internally) was that people loved its service so much that any city or local government that banned the company would face a grassroots wrath. The ride-hailing giant says it had 91M monthly active users and completed 14M trips a day by the end of 2018. In the first 3 quarters of 2020, the company posted a net loss of $5.8B, though the company predicts it can achieve profitability in 2021. If the drivers are reclassified as employees, their pay and benefits would increase. But the app-based gig companies say there’d be far fewer jobs because customer fares would rise and demand for rides would fall. MADD has helped to save more than 400,000 lives, reduce drunk driving deaths by more than 50 percent and promote designating a non-drinking driver.

Of course, every company has to start somewhere—but that starting point doesn’t have to be with you. What’s worth noting here is that you don’t have to be buying dodgy ads to notice this sort of behaviour, where a huge drop in spend has nearly no impact on volume. The reason for this is that many advertisers unknowingly have incredibly high marginal efficiency metrics, such as marginal cost per install in Uber’s case.